markete fearsd, emerging stocks and currencies drop on the announcement that janet yellen will strike a hawkish tone. cash's central bank inject to cool the bond market rally. and lift off, paying the first dividend since 2009 after reporting a record annual profit. next on the earnings front is company ishe mining reining in spending. ♪ anna: welcome to countdown
everybody. i am anna edwards. the oil price on the move again, retreating once again down by 1.3%. where we are on wti right now, down 1% on the brent price. we have a chart that was that into context, a big move looking at the blue line, that is the wti price. is the upside, three weeks ago we were in a bear market on oil. a bull market returned on thursday, speculation mounting at that point as to whether opec would take action to boost prices. the focus on the attention is the data out of the u.s. over the last 24 hours or so, u.s. data showing oils of prices increasing, inventory the highest in 30 years as we come to that driving season. keeping oil very much in the center and the overnight trading session in asia. with that in mind, let us bring up the risk radar. as we said in the headlines, retreat in the asian trading
session. we have the biggest drop in threemarket stocks weeks but really the focus of the market around the united states, putting the dollar index in there, relevant to the dollar and into emerging markets, just how hawkish will janet yellen be at jackson hole, wyoming?we saw mixed manufacturing slowing. we have the korean currency, as north korea does another missile test conducting another missile test. and we have a south african rand rebounding by half a percent, reportsy slumping i 3%, that the finance minister was going to be summoned by the police. we will have further analysis on that story. the balance today being driven perhaps by little bit of a turnaround in yesterday's move and comments coming from the central bank governor. let us to the bloomberg first word news. here is shery ahn. shery: anna, thank you.
central italy has been rocked by a 6.2 magnitude earthquake and a depth of 10 kilometers according to the u.s. geological survey. the news agency has reported damage in the small town, about 140 kilometers northeast of rome. the local mayor told rai that people were trapped under rubble and have the town was destroyed. there have been no media reports of casualties. oil has resumed the drop after data shows u.s. stockpiles rose, keeping inventories at the years. in 30 this follow the jump in prices on speculation that iran may onport an opec freeze outflows to bolster the oil price. there is reports that tehran has reported positive signals on joint action. ministerican finance gordon has received correspondence from official police units and is getting
legal advice on the matter, according to a national treasury spokesperson. the comments came after reports have grown, receiving a warning statement about possible charges related to tax agency units. rand paul to the lowest level against the dollar in three weeks. the -- in three weeks. north korea,o firing a ballistic missile from a submarine in an apparent reaction to the south's annual military reaction. seoul, sayingin the rocket flew about five kilometers before coming down in the sea of japan. the wargames are one of the largest ever, involving 75,000 troops. threatening a preemptive attack in a response. the world bank is said to be doing a bond sale next week, denominated in the imf drawing. 31 notes will rise on august
in china's interbank market. according to one person for the dispatch will be a three-year security with a face value of 500 million, about $700 million. it would be the first bond issue since the 1980's. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . i am shery ahn. this is bloomberg. anna: thank you very much. let us check in on the life market action. asiante sally has all the information. the oil price of determining factor, also concern really about how hawkish janet yellen will be on friday. driving sentiment in emerging markets certainly. juliette: yes, absolutely. in fact, if we look at the emerging market index it is down by 7/10 of 1% at the moment, the biggest drop in about three weeks. and we are seeing stocks fall for everyone that rises, this is
really going to be the market that is most affected, if the fed does move. certainly, this concerned that janet is going to be as hawkish as stanley fischer and a couple of other fed officials were over comingt week, selling through in those markets today. if you have a look elsewhere though, we are seeing upside particularly in japan, that of course on the weaker yen, now moving further away from the 100 handle, 101. the rc mini k nikkei up by 5/10 of 1% of the moment. this also little bit of a moment in shanghai, although flat after the lunch break. hong kong, which i really good session yesterday, down by 7/10 of 1% of the moment. certainly, the energy stock having an impact. and in australia, we are seeing up by 2/10 of 1%. of course the korean currency has been in focus today, after north korea fired that ballistic missile. we have seen the korean won
weaken, down by one third of 1% in late trade. just having a look at some of the stocks we are watching today, air asia and kuala lumpur is a big decline= down by about 7%r/. it could be quite hard for the airline to sustain earning momentum. doing quite well in sydney, the first dividend for shareholders and's thousand nine. a record profit, and we spoke to alan joyce on bloomberg tv, certainly has managed to turn the airline's fortunes around. and looking quite good as well, as we see rubber prices at a two-week low. anna: juliette sally in hong kong. let us stick with the top stories in asia, china's central bank is injecting cash into the reverseusing 14-day purchase agreements. for the first time since february, the funds were added
as policymakers are looking to increase more expensive, longer-term funding to cool the bond market rally. for more on this story, we are joined by asian fx editor robin ganguly. what kind of signal, amongst all of the policy tools and others that the pc of the has at its disposal, what is the message they are trying to send? robin: this has been rather difficult to predict, more difficult than normal. thought.nct lines of the more ominous suggests that the pcob is trying to send a signal, no leverage to buy funds the logic of that is a 14-day. borrowing rate is far more expensive than a seven-day or overnight rate, so that would make it less profitable to buy bonds and ride the record bond rally we haven't seen. the better interpretation is that the pcob is trying to
balance money market rates, but has been using the seven-day rate is a de facto default on interest rate for a while now. just probably expanding it over a period of it slightly longer one-week, i think the latter argument does have its merits. senseas not shown any that it is going to drive up revealng costs, or even the bond rally radically, so to speak. anna: with 10-year government bond yields, they look quite high compared to some others, but of course they have come down there have seen the bond market rally, just as many other parts of the world have. well that bond rally and as result of what we are seeing from the pcob. robin: interesting you should ask this question, anna. what we can take away from last year, the 10-year bond rate rose, the most in a few months. that kind of reflects the
nervousness in the market, as the bond rally is continuing for about 9.5 quarters. there is a certain degree of anxiety in the markets, that regulators may do something to limit the rally, to cool the rally. i, taken in that context, think any slight indications of a crackdown, any slight indications of a cooling effort to drive bond yields higher. but at the same time, until the economy, the fundamentals of china improve, the rally will continue. robin, thank you very much fx editor robin ganguly. jane foley, see in foreign exchange strategist at rabobank. we had analysis from robin about signaling withs these 14-date repossession interpretation, talking on the first one robin talked about, i have a chart that shows the 10-year bond yields in white,
compared to the cost of borrowing at 14 days, and the cost and just seven days, down at 2.6. you see the rationale perhaps why the chinese government feels that if make us money more expensive and perhaps there will be less temptation to go out to use it to purchase government bonds. put this into context for us, rates are higher than what we are seeing in the west. jane: they, are, and he. but as you pointed out they are seeing a significant bond market rally. very much tied in to the markets, looking where they can get yield, maybe being forced out of developed nations into emerging markets. and we have seen this all over. there is desperation, the yield, that is one of the reasons behind this bond market rally, the officials in china are trying to staty calm. they really do need to control currency. and i think that is perhaps what they are trying to do, just trying to point out that people really should not get too
excited. and that you pay attention to the fundamentals. anna: where do you see the currency heading from here. this time last year, we were focused on chinese currency, perhaps as a relief to anyone who wanted to take any kind of summer vacation we don't have to be, so -- jane: again, the fact is a worry in itself. everyone had so much focus on china, but this year we have seen is managers saying, well, china appears to have gone away or at least sunk into the shadows. and therefore, we can be bullish again and risky, etc. i would be very cautious come to the conclusion, because some of the worries we had about china at the start of this year are very much still alive. for instance, a lot of the fitness has been built around that. there is still of course the chance that that increases the possibility of a hard landing. and while i think yes, chinese concerns have gone away, we
should be extremely cautious. and there is still the risk that china will try and use a weaker currency to stimulate their export growth and the economy. anna: there have been critics who said yes, ok, maybe chinese authorities have stopped growth, but they maybe have done that on the reforms that have been needed. i have another chart here jane, showing the size of chinese gdp compared to the u.s. and the eurozone. and a nice story in the eurozone, asking if they have something to be proud of, that it might overtake the eurozone as you can see fairly soon, china gdp getting very big. in the blue, it could become -- chinese gdp is tracked to overtake the eurozone. and as we go to the g-20, some people argue it actually they have got room in china. that they did not have a hard landing in the chinese economy, look how we manage that. jane: i think it is too soon.
certainly, this is a phenomenal economy. there is no doubt about that. but when we think about some of this worrying signal, the buildup, i do think we have to be very cautious about medium-term risk associated with china. anna: jane foley stays with us. more on other parts of the world as we go to the program. here are highlights for the day ahead. we get first-half earnings from glencore and wpp, and at the same time the final meeting of second-quarter gdp from germany. vice president vegas turkey, in the aftermath of a failed military coup. meanwhile, the german chancellor angela merkel continues her whistle stop tour of the eu, ahead of next month's brexit summit in bratislava. no turbulence, as australia's flagship carrier post the best
anna: welcome back. it is 1:18 in hong kong. that is a live shot of hong kong, were the hang seng is down 8/10 of 1%, underperforming the rest of the asia-pacific with a broader index is down by 1/10 the 1%. 6:18 in london. let us to the bloomberg business flash. here shery ahn. central italy has been rocked by a 6.2 magnitude earthquake at a depth of 10
kilometers, according to the u.s. geological survey agency. the news agency has reported damage to small town, about 140 kilometers northeast of rome. the local mayor told r thatai people were trapped under rubble and half of the town has been destroyed. pfizer has announced a record annual profit and the first dividend since 2009, the underlying pretax profit jumped 57% to 1.5 3 billion australian dollars. the ceo alan joyce told bloomberg he is positive on the outlook for the firm. alan: i'm actually very excited about the future, because there is so much opportunities in the pipeline for us with the delivery of the 787s, to change the network internationally, to continue the expansion of jets in asia, the growth in japan,
vietnam, and here in australia. and with the program, if i am enjoying it, and the shareholders are continuing, i will continue in the role. nothing is changing on that. shery: the chinese owner of new may bewaldorf astoria closer to a planned hong kong ipo according to the people. familiar with the matter, they have pitched a role in the share offering, one suggesting a deadline of this week. two of the people said the include, operations as well as many of the overseas businesses. and that is your bloomberg business flash. anna: shery ahn joining us from hong kong. the u.s. vice president joe biden visits turkey today following a failed coup attempt last month. simin is it istanbul for us. great to have you on the program. joe biden in turkey, what is
expected to be on the agenda? well, he will be walking a fine line between showing somert and airing concern. u.s. vice president joe biden will be the most important u.s. official since the failed coup more than a month ago. and he will be meeting with president erdogan and the prime minister during his one-day visit to and car up. one of his main talking points will be the and tradition of gulan, who turkey sees as the mastermind of the failed coup. they have been demanding for over a month now that the u.s. hand him over, but washington has yet to do so. and this has angered turkey even further. also one of the main talking points will be the fight against the islamic state in syria and iraq. u.s. and thend the nato allies have been working to
fight against the islamic state, but there has been some disagreement about who they should trust in the fight against the islamic state. the u.s. is working alongside the kurdish group, but turkey season as a threat. anna: simin, it looks as if turkey is starting on the subject, starting a major offensive in syria, is getting further comments about that overnight. what do we know? simin: yes, turkish armed forces have started bombing islamic state positions in syria's aleppo province. and there are some media reports that ground special forces are also going in from the ground. now, this comes days after a terror attack in turkish city on the border of syria. more than 54 people lost their lives during a blast at a street wedding. anna: simin, thank you. live from istanbul.
jane foley, senior at extra just is still in the studio. let us talk about emerging markets. starting with turkey, a rate cut from the central bank over in turkey, even as inflation has accelerated for a third month in july. a complicated line. jane: perhaps the acceleration is from tobacco, and not in the core index, and from that point of view i think core index is better behaved. they have the interest rate cut when they could, very much anticipated by the market. i think looking forward, it is a very complicated picture looking at turkey, interesting we have such a senior u.s. official visiting turkey today. because there is this perception that after the failed coup it was rush of turkey turned to, not the west. cap's the reason why we are seeing joe biden in the u.s., reversing some of that feeling. but we actually have consumer confidence in turkey pushing up.
we see a big leap and consumer confidence, working to get political support, the approval rating for the president. it is interesting that weston investors are still very thectant to look into medium term in turkey. that is an issue given the current account deficit, given and ite tourism is down, is problematic for them. but as it stands, given the coup we had very recently, they stood up quite well. anna: let talk about another emerging market, south africa. we saw the plunge and the rand yesterday, concerns of the increase risks in the prime minister in the president. we have seen the way that the marcus respect gordon, when he was reinstated to sort of calm markets. this understandably spooked the market. we have the rand gaining poise this morning, but there was a big drop yesterday.
jane: i think people really want to know why the police are involved in the finance minister's affairs. we need to get to the bottom of that. but as we see the market recovering little bit, perhaps people suspect that the market is, as you said, generally supportive of this market minister. we have seen a very much in the performance of the rand. but i'm also say that because of liquidity issues, a lot of liquidity in the rand relative to other market currencies, it is seen as a proxy for people who want to be invested, because they know they can get out relatively easy, too. and there is this general risk appetite for emerging market assets, you can often see the red performing quite well. i have seen a lot. and what the fed does is good to be a real big influence to what extent that extends the next few months. anna: we talked at the top of the show about questions being asked of the markets today, about just how hawkish janet yellen will be on friday, after
we have seen a host of feds members being quite caucus. how do you think janet yellen will be? to leave the possibility of more cuts on the table. she has done that before. why walk away from that juncture? we did have that strong new-home sales yesterday, which did again push this view she could be hawkish. and we have those comments over the weekend by president fisher, too, which again suggest that maymarket -- janet yellen be hawkish. i think if we look between now and it's a december, i think that is the meeting where they will more likely hike if they want to go this year, we still have many more data points, and they'll be really key. anna: illustrate that point you mentioned, new-home sales in the u.s. jumping to the highest and nine years, that clearly illustrated on this chart hre. of course we had contrasting some gloom.
anna: welcome back. this is countdown. , trading atoa just 2% in dollar yen this morning. a new edition of daybreak is now available on your bloomberg and your mobile. the function is go, what you need to enter. let us take a look at some of the stories they are covering today. and of course they have gone with a cover story this morning on daybreak, the magnitude 6.2 earthquake that has shaken central italy. the town talking this morning about how the town of about 140 kilometers northeast of rome told the italy news agency that half of the
town has been destroyed with people trapped under the rubble. we will bring reports, damaging buildings and blackouts around the epicenter, we will update you as we get more details. another story there covering on daybreak is the report saying that for the world's biggest banks are teaming up to create a new digital currency for settling financial transactions. and finally, daybreak focusing on the rand, plunging 3% after south africa's finance minister gordon was summoned by police investigative team. we had a bit of a rebound in the rand this morning, but not enough as you can see clearly there, to take away from the fact we saw that plunge in the south african rand yesterday on those reports that the central bank governor has been talking this morning. even more positive commentary, underpinning things little bit. 6:31 in london. emerging market stocks and currency dropping that janet
hawkishill send a ceremony at jackson hole, wyoming. eye. has been casting an nejra: i have the msci emerging market index, falling the most in three weeks. and the msci measure of currency heading for the biggest decline since june. now, of course the future pricing in about 64% price of a rate rise in december. terribly hawkish from the market. but if we look at the bloomberg dollar index nevertheless, it is rising for a fourth day. here, you can see the major currencies against the dollar. the dollar strengthening against most of them really, apart from the south african rand, which is rebounding after falling to the weakest level in three weeks. yesterday after reports that the finance minister was summoned by police. but to get back to the dollar,
just yesterday saying to the dollar is likely to resume losses, if janet yellen fails to deliver a strong signal. fore there is much scope that are outside in a september move is indicated. remember, the bloomberg dollar index was down yesterday. goldman saying to not bet on a dollar selloff as a dovish fed is priced in. upot of focus on the dollar, for a fourth day. that brings me on to fx volatility. because over the past few days we have been seeing equity volatility coming down. jpmorgan measure of global exchange rate volatility, you can see at the chart end, a one-month high. but if you look at the broader context, look at what happened around brexit, at what happened in february this year, really not looking at a terrible amount of volatility in that broader context. but it is at a one-month high. and we look at treasury volatility, that has been coming
down. looking at the move index, that is actually near a 20-month low, that bank of america index. this is just showing you the 10-year yield range, 10-year and note stuck in the tightest monthly training range a decade. it has not closed above 1.6% since june 23, of course talking pre-brexit. we are about 1.55% on the yield as you can see at the moment, so a lot of anticipation ahead of jackson hole. anna: something about waiting for godot, waiting for janet yellen. thank you very much. oil slumping after industry data shows jumping u.s. crude stockpiles. joins usmal el-din with a chart of the hour. telephone we need to know about oil markets right now. yousef: anna, it was clear that oil inventory was going to take some time, and
uphill struggle. ofd to report an increase four point four 6 million barrels last week. we will get additional perspective from the official government data, and i put this on the chart and you can put up on the bloomberg, what you are looking at here is u.s. crude data., based on that those are still at 521 million barrels all the way up to august 12, the latest data point we have so far. and on the reference point there, the wti price, the line in blue, you can see again that u.s. crude supplies are above 170 million barrels above the five-year average. so what we are looking at is the risk count playing into it, additional supplies into the u.s. crude equation. but it is not that front of the supply-side i'm looking out for, it is also what is happening with opec. because we have comments from the iraqi oil minister, rather the prime minister that he made
in the last 24 hours, saying that iraq is not pumping as much oil as it should. and we have also heard speculation that iran is more open to a freeze agreement. so plenty of traction on the opec front that would indicate that with everybody pumping, or almost everybody having a record high, there is more information to come to an agreement. anna: yousef, thank you. the update on the oil market. yousef gamal el-din joining us. brexit is turning out to be a disguise for some european bond markets that were expected to be a big cap. thee it initially jumped in june 23 oh, it soon reversed with those on spanish bonds falling to records in august. in italy, bonds rallied even as the country faces a banking crisis and a divisive referendum of its own in october. let us bring jane foley back into the conversation. to the extent to which you can
lay the blame or attribute the lower yield to brexit of course, maybe a topic of conversation, but broadly speaking investors do not seem to mind the wrist if the ecb is there with a backstop. once again back to central bank. jane: you see more quantitative easing of course in the bank of england, and the speculation and the ecb may up the ante quantitative easing. that is the answer, the pressing matter. we have seen this for quite a long time, and effect we can turn this back if you like to janet yellen, and i would say that the downward pressure on the u.s. yield curve is people pushing out, investors pushing out expectations of a fed hike. that has a massive influence on yield curves everywhere else, as people are accustomed to seeking out higher yields.i think this is a very depressive impact on u.s. oil pushing people into emerging markets, and i think it is also really affecting the past mechanism of monetary policy a lot of central banks, because the ecb, bank of japan, austin
australia, new zealand, they're trying to get the value of the bond down there that is very difficult to do when the u.s. is being pressured by expectations of stimulus by the way of u.s. and it is really making it very, very difficult for the other central banks to really get a lot of bang for their buck in the study was they're doing. anna: some of the stimulus, the ecb being one globally, they might actually want to see something more hawkish from the fed. and in jackson hole this weekend -- etc. ecb, bank of japan, it would make their life a lot easier if we were to see higher yields and a higher dollar, for instance in the u.s., and it would mean that they can get further stimulus, that their currency -- it would be very very welcome if that was the occasion. and i think from a global perspective, if we did have the
u.s. economy which was strong enough to take another interest rate hike, is would be good news for us all. anna: certainly, we talk a lot over recent days the low interest rates, but also the longer-term risk-taking that they can stoke in markets. mario draghi then talking in july about readiness, act ifness, ability to needed. what do we expect next from the ecb? jane: again, if we look at the post-grexit data, that was not bad at all. and i think if we stay in the u.k., some of our very frayed nerves going into it have been calmed by the initial data. of course, medium-term we saw the headwind potential, investment flow, affecting gdp, german exports, etc. we have a huge amount of uncertainty. but for now, things have been ca
lm, and i would think that would let mario draghi ease more, but perhaps not in september. anna: the resilience of u.k. data so far? jane: better than it could have been married but if we look at the data we had last week, that was great. anna: was it just the weather? jane: we know something about the u.k., that the weather is going to change their we know it will not be that way long time. what is more worrying is the medium-term investment flow. now, investment flows are related to job creation. if you do not get back, that is going to be bad for gdp, etc. so, that is concerning. we did have an investment survey out for july, public to the start of the week that was really quite horrible. i think that is a big concern going forward. i think sterling remains a very vulnerable currency. anna: what kind of level are you thinking on currency at the moment? jane: i haven't told, not quite bearish, but we are looking at
125 on table. 6-12 12 months, looking for sterling to drop, perhaps not quite as horribly as some other banks. we do needyou know, to see what happens with investment, whether or not we get that recession, how bad it is, etc. of horrible currency yes, even though the immediate reaction on the vote have been that are than expected. anna: we talked earlier on this week with one of our bloomberg team who did a nice story on how even if we do not see parity of the moment between the pound in the euro, and almost feels like that for brits traveling. 72, how much weaker does the pound to get against the euro? jane: so, i am thinking that a weak pound, maybe a little bit further, but i think we have to look at the european perspective, too. key,year we have really
elections in germany and france. and those i think will perhaps let us know if we have anti-eu sentiment in those countries as well. we do know there is anti-eu sentiment, and in countries such andtaly, france even, whether or not that is what to be highlighted next year, or whether or not the brexit result in the u.k. is calm. anna: it remains to be seen. soon,hat vote happened so brassica not read anything broader. jane foley stays with us here on countdown. risen at the company announced the first dividend in 2009. this comes as the ceo alan joyce's turnaround program delivers a record profit. alan: actually, i am very excited about the future of the group because there is so many opportunities with the delivery of the 787s to change the network internationally.
they continue to expand jet in asia, big growth in japan land in australia.d if i am enjoying it and the board of the shareholders want me to continue on the job, i will continue in this role. and nothing has changed on that. anna: bloomberg company reporter angus whitley joins us. great to have you on the program. how did alan joyce managed to pull this off? i see they are trading higher by 1.3% towards the end of the session. anna. yes, the morning, as alan joyce mentioned there, this three-year turnaround plan is really responsible for this rebound, and it is an equitable rebound by any measure. just two years ago we saw the airline on its knees, buried under record losses. there was even a public petition to get joyce sacked, going even further back he had grounded the
entire fleet to take on the labor fight. so, in two short years he has cut thousands of jobs, axed roots, and also had a big lift but the offshore prices, that has generated a record profit today. and the income of more than 80% to over one billion australian dollars for the first time. and the first dividend it since two thousand nine. was a welcome surprise to investors? angus: yeah, it really was. this was a long neglected regular payments to shareholders. they survived on one-off payments in the last 12 months, around about $1 billion in total. but they're really looking for regular reinstatement of dividends, and even optimistic analysts were not expecting the dividend to come today. it were looking maybe 12 months down the line, so joyce is rescinding a message that these profits are here to stay. at least some kind of profit here to stay, and expect the
future, any capital returns to shareholders, and that is good news if you're looking for yield, and i know investors are looking for yield with interest rates so low. opencould open the stock to a whole new group of investors, and investors buying shares up 1%, were of as much as five percent earlier today in sydney. thank you very, angus whitley in sydney for us. still with us, jane foley. let us just finish our conversation this morning with a quick word about australia, new zealand, the currency there. reading the citigroup this morning or a report by one of my colleagues on it, suggesting that they like the aussie and the kiwi, their favorite currencies at the moment. do you see those currencies? jane: again, very much on the back of the emerging markets story. people being forced to look for strong yield.
and if you look at that in the context of the g 10, they are the highest yield. and i think it is very interesting that performance of this, particularly the new zealand dollar, the brexit referendum, normally you have it working the opposite way to the japanese yen. when the japanese yen goes down, they go up, and vice versa. after the brexit vote, the japanese yen went up and these currencies went up, too. very interesting that investors trade but in the yen also bind yield. i think the story really relates to will the central banks cut that trade little more by cutting interest rates aggressively, and will the fed help them out by hiking their rates in december. anna: looking at those currencies and the interest return on the new zealand dollar and obvious trillion dollars showing the appeal, showing how perhaps the attraction for that relatively higher yield, too hard to resist. it does come down to the fed as well. jane: massively so.
if the fed were to hike interest rates, these guys would really breathe a sigh of relief. the big question now is how much will they be in debt, have to cut rates, to try to offset these inflows? we have comments from one of the australian officials recently saying it was all very well we had this investment when they were helping with our mining investment, but of course the mining investment in a few years ago. and he's in now we are having a lot of investment in finite, assets something we really want to do. so they do not really want this risk trade, but they will have to cut interest rates more to try and limit that. but if the fed were to hike in december, it really does help those guys out. anna: jane bowling, thank you very much for spending the last 45 minutes with us. senior fx strategist joining us. still to come on the program, a year on from glencore's shocker, the world's first biggest miner, we break the numbers at 7:00
u.k. time g when or, strong set of first-half numbers. what they had to say at the top of the hour, despite the words of this man here, complaining about what brexit with me. and the south african rand slumps on reports of the finance minister was summoned by authorities. we get the latest from johannesburg. this is bloomberg. ♪
anna: welcome back. this is countdown. 6:51 in london. let us get the bloomberg business flash. here he shery ahn. people haveast two been reportedly killed in the italian town after a 6.2 magnitude earthquake hit the center of the country. that is according to the on site news agency. to ahe local mayor says
broadcaster that people were trapped under rubble and half of the town has been destroyed. battery more powerful to the model, saying it makes it the fastest production car in the world, and it also says range has increased to more than 300 miles, or about 500 kilometers. car, aor electric four-door, and has a front thek, rear trunk, and to be fastest car in production of any kind, i think this is really going to send a great message to the public, that sustainable transport is the future. chinese owner of new york's waldorf astoria may be closer to a planned hong kong ipo. according to people familiar with the matter, and insurance group will pitch a role in a
share offering with one suggesting a deadline of the end of this week. two of the people said the listing may include a life insurance operation, as well as many of the overseas business. and that is your bloomberg business flash. anna: sherry, think you very much. glencore reports first-half reports at 7:00 u.k. time, around seven minutes. investors will be watching for the debt reduction strategy, as asset sales continue. this morning, the agreed to a $700 million deal to sell future out ports from us trillion mines. research,mmodities colin, always great to see. let us talk about the streaming deal the glencore has done in relation to this australian copper and gold mine. the balancellars, sheet of the mining company, this just more of the same
really coming through from the mining sector as a whole. mode, still in divestment trying to get a balance sheet back in order. now, the deal is not new. but glencore has done more than anyone else, ahead of the curve. it is interesting. relatively short asset, hence the lower transaction value, just comes into life the middle of next decade, but just freeing up the balance sheet, getting some capital in upfront, and they are doing much more work to repair that balance sheet the many of their peers. anna: how much have companies been dealing with minors getting up front money, it is something we see with a lot of mining companies? because glencore's of the only one cutting debt and doing asset sales. colin:: now, a lot of committing streaming companies giving upfront capital and taking it, interesting to see side, and that
is to the next day to the process. anna: we saw the numbers, rio tinto the lowest in more than a decade. this is a sector that has struggled, even though share prices recover nicely this year perhaps. what light at the end of the tunnel do you see in terms of pricing of some of the basic metals? colin: this is interesting. now, the miners have been helped a lot by the fact that china has pushed back into a commodity intense approach. the chinese government is working very hard to hit that 6.5% growth target, and while that happens demand for commodities will be. and we see improving on the back of that, plainly in terms of the chinese government bond, we think this will hold. but we know that they therefore have a period to trying to the balance sheet back in order.it is interesting , you are not seeing mining companies commit hard to growth
yet, showing that they don't have the confidence further out, still trying to get the balance sheet back under control. and that is not allowing them to be opportunistic at a point where the cycle is actually stuck. i would say commodity prices have bottomed, but unlikely to accelerate anytime soon. anna: and they have a lot to thank the pcob for. how is this helped glencore, thermal coal? colin: it has been a big surprise this year, a market where demand is actually been falling, but the chinese government has been so desperate to get coal miners back into cash positive territory, they were willing to cut the price by workng the iners to only five of seven days. glencore has been a national beneficiary of that.the challenge is fighting chinese the repulsive. and we think they were relaxed that policy in the coming period. anna: colin hamilton, head of
we are waiting from breaking news. expected to report numbers. coming through right now. 6.54 billion, compared to the previous year. looking through for the organic revenue number. 690 million pounds for the headline, eds, 39.1 million. organic revenue. we will keep our eyes looking for that one. this is the world's largest advertising company. we have seen an uplift.
how much that has offset the brexit drag. let's move on to the numbers from glencore, the mining company. four point zero billion dollars against the estimated $3.9 billion. income, $300 million through the estimate was for $254 million. nicely ahead of the estimate. those are the headline numbers coming through from the mining company. this is a company that has embarked on a big rescue strategy. selling assets, $2.5 billion worth of stock. slashing spending. let's go to the futures.
a little bit weaker at the start of trade. perhaps note a prize. see thexpecting to european markets down at the start of the trading day. moves, onde down by the risk radar you can see where we are. i'm urging market stocks and currencies, something of the team. we have seen the biggest drop in stocks this morning. a move higher on the dollar index. how hawkish will janet yellen be? currency. the la volatility in the south african rand. 0.2% following a big slump yesterday.
commentscentral-bank on south africa. that is a look at where the rand is trading. here's a look across the bond markets. least 10 people have been killed after 6.2 magnitude earthquake it's the center of italy. the u.s. geological survey says the quake struck 140 kilometers northeast of rome. there were a series of aftershocks reported. oil has resumed its drop after industry data shows stock tiles arose, keeping inventories at the highest level in at least 30 years. this follows a jump in prices on speculation iran may support an opec freeze. there are a boards to ron -- t ehran supports joint action. the south african finance mr.
has received a correspondence from a special unit and is getting legal advice on the matter. that is according to a national treasury spokesperson. this is after reports he was to receive a warning statement according to a text unit to read the rand -- two attacks unit -- unit.ing to a tax the rocket flew 500 kilometers before coming down in the sea of japan. this happens as there are wargames with the u.s.. powered 24 hours a day. stories.ind more anna: thank you very much. let's get a quick word on
breaking news. some details coming through here pfizer. -- primarily, outside the u.s.. the agreement includes various drugs. make an up front payment of $559 to esters in a $550 million to astrazeneca. juliette: everyone awaiting janet yellen's speech on friday. there has been weakness in emerging stocks. if janet yellen is going to be hawkish, there are markets that
are going to be suffered the most. philippines down, 1%. taiwan, down 0.2%. korea also impacted by the weaker currency. weakness in hong kong. about the energy stock story. 0.8%.ng seng, down asiatle upside on that market. japan has closed higher by 0.6% thanks to the weaker yen which export companies higher. a different story. in australia, closing a little .igher, up by 0.1% qantas has been in focus. share holders a dividend. has been korean won showing weakness against the
dollar. this is an response to the missile north korea fired off its eastern coast. downan see the currency, 0.5 percent. the worst of the emerging market currencies. anna: thank you. notes, as0 your investors await janet yellen's speech on friday. yellen is scheduled to speak at the symposium in jackson hole wyoming. indicatedents interest rates may still rise in 2016. great to have, you on the program. i am interested in your thoughts ahead of friday's speech by janet yellen. how hawkish do you think she will be? you look at the
title of her speech, it is very generic. the monetary toolkit. she is leaving it wide open to all kinds of interpretations. we have had a slew of speakers suggesting the fed could -- the market is pricing over 50% chance they will raise rates. we think she will keep the door open. stick largely to script in terms of the minutes and what the fed communications are so far. we think if you look at the data, the labor markets, reason -- recent housing markets, the u.s. economy remains on a robust path. it remains to be seen how they view inflation. whether we will see it higher for a bit longer. when you think that the fed to two monetary policy for
years hence, they are at the stage where we expect they will raise rates but it is tricky. anna: 53.9% chance of rate hikes by the 14th of december, the last monetary policy meeting of the last year. beautiful views and certainly -- scenery in jackson hole. a lot more academic. what will you be looking out for? obviously, the markets will be focused on the short-term clues as to where the market goes. a lot of soul-searching going on about the merits of low interest rates, negative interest rates. what kind of conversation are you expecting there. was the theme of the debate. resilience.for
a lot of debate, looking at the medium-term. market is focusing on the short-term and interest-rate policy. aboutis a lot of debate what is viable policy going forward. we are in a new paradigm. we have seen rates at a low level for a long time. the rate could be lower than historically. i think there will be a lot of discussion around the toolkit's for central-bank monetary policy can read of the easiest thousand was we could have a higher inflation target which would mean the feds have more room to play with. anna: i've got the data showing new home sales jumping in july. you mentioned that as one of the stronger point of the data set.
on the other hand, we've got manufacturing data. what do you see in the later stages? what are your expectations for the rate hikes? guest: in our view, given that they do remain cautious, at the last possible juncture, we think there is room to raise rates. anna: thank you very much. to a africa's rand plunged three-week low against the dollar after reports the country's finance minister was summoned by the police. they are taking legal advice on the matter, that is according to a national treasury spokesperson. to johannesburg. great to have you here. how has the finance minister
reacted the summons he has received? reporter: good morning. this developing story is very serious. we know the finance minister's spokesperson said he is seeking legal advice. mustahead of the report he report to a police unit. anna: it seems markets are nervous anytime somebody they think they trust such as the finance minister is perhaps a little more distant from the president, in this case jacob zuma. markets were nervous.
and then we saw the rand recovered. now, further weakness coming through the rand. our market still nervous around this story? mo: yes, definitely, markets are still nervous. the rand, weakening. we haven't seen that kind of weakness in about three weeks. we had stable local government elections. these new allegations weighing on the rand. we know there are bonds do in 29 aces, which are down points. witharket coming through the reaction is not happy with the news the finance minister could possibly be arrested. anna: we were talking about the challenges, thank
kevin: the death toll likely will climb as the morning goes on. the civil protection people say there are a lot of people trapped in the rubble and there is a lot of difficulty getting to the earthquake sites. anna: there are more towns being damaged. towns feeling the brunt of effectively of the quake. area is about 65 miles northeast of a rome. there are small villages. they have small, local populations but it is the height of the tourist season so there may have been visitors. that it is a part of italy is used to earthquakes, isn't it, kevin? kevin: they are trying to figure out how bad this one is. saycivil protection people it is difficult to get to the area. the full extent of this will not be known for some time.
anna: thank you very much. e joining us.o we will continue to watch this. in 2009y an earthquake that killed more than 300 people. let's move on and talk about the european economic story. brexit is turning out to be a blessing in disguise for some european bond markets. jumped,eld initially that has been reversed. in italy, bonds rallied. a bankingy faces crisis and a divisive referendum. let's talk about the european economy.
marilyn, interesting to see in the wake of this brexit vote, a lot of people were concerned levelseripheral debt would be driven down. when the ecb is a backstop, people put their concerns to one side. marilyn: it is too early to tell, both for eu members and also for the u.k.. i certainly think we have seen in august, there hasn't been supply so that is a key factor. the ecb as a backstop. a massive fire of corporate debt and government bonds as well. seeing real gdp growth in tourism booming. there are positive fundamentals coming through, particularly with spain. in a: we looked recently at the spread of the spanish bonds against italian. even without a fully formed
we focused on the again in the spanish economy. marilyn: there are improvements in the spanish economy. is on the right trajectory. there are improvements. also, when you look at net supply, that is another factor. aboutmario draghi talked readiness, willingness, ability to act. a lot of conversations about negative interest rates. marilyn: in our view, it is unlikely they will cut rates beyond where they are now. previous communication focused on tools.
we do still favor peripheral .ountries space, we have seen a huge rally in eligible bonds for the corporate purchase program. we are tending to favor either ,ubordinated financial hybrids bonds less eligible or not eligible for the bond program. and a you are not going be things the ecb is going after. marilyn: we saw a tremendous rally in the bonds that the ecb can buy. we are keeping an eye on it, but when you look at valuations and opportunities, investment grade and emerging markets, we want to be diversified and put our money to work. how does that make -- what
lens do you look at the u.k. through? marilyn: it is very early. some ofwhen you look at the surveys, business confidence, consumer confidence that has dropped, that is something we are keeping an eye on. be holding looks to up pretty well. the depreciation of sterling should help as well. so little that is known. we don't know what we are going to be going for. stands of our negotiating partners in the eu. until there is more clarity, it is very difficult to tell. anna: thank you for joining us. here in the studio. we have been tracking the commodities story this morning.
we are getting more commentary from the company, with the cfo saying they are liking to return to dividends. it is very interesting they should make these comments about the dividend. this is one of the tactics employed by glencore to try to rescue their balance sheet. we got comments from the cfo. return to dividends would be possible next year. interesting to see further commentary about that. broadly, it hurts the business.
anchor: this is "on the move. 8:30 in berlin. we are counting down to the european open. here is what we are watching. in earthquake shakes central italy. at least 10 people are dead following a 6.2 magnitude quake early wednesday morning. glen cove reports a slump in profit that adapts a more aggressive debt reduction